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Closing Bell

News/Business. Maria Bartiromo, Bill Griffeth. A guide through the most important hour of the Wall Street trading day. New. (CC) (Stereo)

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01:00:00

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San Francisco, CA, USA

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Virtual Ch. 58 (CNBC)

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mpeg2video

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ac3

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528

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480

TOPIC FREQUENCY

Us 8, S&p 7, Alcoa 7, Europe 6, New York 5, Angela Merkel 4, U.s. 4, Apple 3, Klaus Kleinfeld 3, Romney 3, America 3, Israel 3, Germany 2, Geico 2, Ken Lay 2, Obama 2, Colombia 2, Rick Santelli 2, New York City 2, Ennis 2,
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  CNBC    Closing Bell    News/Business. Maria Bartiromo, Bill Griffeth. A guide  
   through the most important hour of the Wall Street trading day....  

    October 9, 2012
    3:00 - 4:00pm EDT  

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expanding waistlines and the growing size of our refrigerato refrigerators. fridges now average 22.5 cubic feet. i don't know how much that is, but apparently it's larger than used to be and so are we. thanks for watching. >> "closing bell" coming up next. hi, everybody. good afternoon. we enter the final stretch. welcome to the "closing bell." i'm maria bartiromo at the new york stock exchange. another tough day for stocks today. we have the s&p and nasdaq poised for a three-day losing streak. the dow on top for a two-day drop. >> how was the columbus day parade in new york city? >> it was spectacular. >> she's an institution in new york city at the fabled columbus day parade. she's the commentator on that every year. >> that's where i was yesterday. it was amazingly fun. >> always look forward to your description of the high school bands out there. i'm bill griffeth. today's selloff comes as investors gear up for what some say could be a tough earnings
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season. we'll know in about an hour when dow component alcoa reports its results after the bell. coming up, ceoklaus kleinfeld talks with maria about the global economy. we'll also be the first to have yum brand results coming up. another key indicator of where this economy and market may be headed. here's where we stand now. a selloff this morning with the dow down 79 points. just kind of bumping along the bottom of the day, now at 13,506. the nasdaq is down 37 points. all these charts will look similar today. 1.2% down on the nasdaq. the s&p is down nine points at 1446. >> it's not a very happy anniversary today for the dow's all-time high. it was five years ago today the dow and s&p 500 hit their all-time closing highs.
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right now the dow is about 600 points away from that high-water mark. for the year, stocks are still up a solid 15%. why does it feel like it's the most hated bull market in recent memory? the numbers show that main street investors are not on the ride. they have been pulling money out of the stock mutual funds 15 of the last 16 months, putting cash into so-called safer assets, bill. we know that to be bonds. >> yes, we do. in today's "closing bell" exchange, we have larry blazer, peter bookbar, bob, and rick santelli standing by as well. peter, we all realize that the fed has had something to do with the comeback of the stock market right now. compare to where we were five years ago. the economy is better than it was, yes? >> well, yeah, it's better than it was because the comparison is so poor. we talk about the dow being where it was five years ago, the s&p 500 is actually where it was 12 years ago. we've had a tripling of the fed's balance sheet. so have we made real progress?
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not really. >> what do you think, larry? do you agree with that? how are you investing today going into this third quarter earnings reporting season? >> well, it is a bittersweet anniversary, as we say. as we look ahead to earnings season, investors are going to see they have a diminished outlook of the global economy. they're also going to see weak corporate earnings domestically, something we haven't seen in three years. and they're going to see higher taxes. that's a lump of coal for any anniversary. rather than focus on the negatives in alcoa, focus on the fact they have asian exposure, european exposure. focus on the positives. financial engineering is back in this market. some of the parts for a company like alcoa exceed the value. >> you're making excuses for alcoa even before the ceo comes on. i like that. bob, what do you make of the action? put it in perspective, five
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years compared to now. >> the dow jones industrial average went from 1500 to 750. that was cut in half. that certainly was a disaster. >> you mean the s&p? >> the s&p, excuse me, bill. nonetheless, bottom line is holding on from that point to here, you can say, yeah, does buy and hold still work? that's what everybody's interested in. i think the evidence is it certainly does, but you have to have long periods of time to look at it. i'm not so impressed that we're not anywhere where we were 12 years ago. if you invested on a regular basis from now through the bottom, i think you'll find you have not done so bad here, certainly if you had it from the high 12, 10 years ago. most people don't invest that way. i'm not that impressed with the idea we haven't gone anywhere in 12 years. >> rick santelli, what are you seeing there? we had news out of europe. what's the impact? tell us about rates. >> i think the impact is that the markets paid a lot of attention to what the euro
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message was when it was selling off today. really, that's the driver of the day. in terms of the discussion about the most hated rally, and i think bob coined a great expression there. look at a jar going back to '03 with a ten-year note and that interest rate. there's no validation. from '03 to that five-year anniversary that we're celebrating today, rates moved higher, stocks moved higher. look what's happened since. it's all working to the benefit of stocks. that's why there's so much regarding the disparity between fundamentals and what stocks are showing. >> but even at these historically low rates, rick, the appetite for the three-year note was very high today, wasn't it? >> it was record-type demand with regard to the bid to cover. it just goes to show buy and hold is alive and well. just not buy and hold in the stock market. >> peter, are we in a bubble in
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the treasury markets? you're always highlighting the demand for a lot of these options on your blog, but at what point do we start to feel like it is way over bought? >> well, i think we're in the midst of a bubble. bubbles can last for a while, and it's impossible to know exactly when it's going to pop. it's not just a bubble the fed has created in the treasury market. the peripheral marks are also seeing bubbles. that's what the fed has created, a very artificial environment where price discovery has been destroyed because the price of money is fake and artificial and not real. >> peter, how are you investing in this environment ten? what are you doing in terms of allocating capital? >> well, you have to -- from the big picture fed perspective, you want to be protecting yourself in non-dollar assets and hard assets and commodities, precious metals, commodities that defends yourself against what the fed is
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doing. i think earnings will disappoint, not only for q-3, but also the guidance for q-4, so you have to be defensive over the next four weeks. >> everybody talks about the most hated rally. i know i coined that. while money has been coming out of stock mutual funds, there has been money going into etfs and high-yield bond funds. they're not really bond funds. in times of volatility, they act like stock funds. people are seeking alternatives in stock-like instruments. >> bob makes a great point about high yield. we have seen a virtual stampede into high yield. investors have to sell their soul to get 3% today. all is not well on the anniversary of this bull market high. >> let's face it, guys, historically speaking those are hardly high yields we're talking about. >> lowest yields in history. >> yes, they are. okay. thank you. talk to you later. 53 minutes left in the trading session. the dow hovering near the lows of the session, down 85 points.
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>> stick around. we have a lot more to come on this busy tuesday edition of the "closing bell." coming up, payback? the president keeps painting wall street as the villain. >> bernie madoff, ken lay. criminals, gluttons of greed and the evil genius who towered over them? one man has the guts to speak his name. >> big bird. >> mitt romney knows it's not wall street you have to worry about. it's "sesame street." >> now wall street strikes back with its most powerful weapon, money. plus, street smarts. wall street about to get a look at a whole new set of regulations that could impact your bottom line. we'll give you an exclusive sneak peek. and chaos in the ring. the bulls may be running wild at nyse, so how come market maichbs are still wondering why? also, unwelcome visitor. german chancellor angela merkel gets a less than warm welcome in
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greece. is it time to fire her travel agent? that and more on the "closing bell."
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welcome back. one of the features in today's trading, oil prices striking again, this time on renewed tensions in the middle east and political maneuvering in israel. sharon is here with details. >> it was just about an hour ago that israeli prime minister benjamin netanyahu said he wanted to hold elections as fast as possible. traders had been anticipating this announcement pretty much all day. that's one of the factors that helped to support oil prices. some traders saying this may be a type of mandate on what he really wants to do in terms of iran. others saying it's like a referendum on a potential war between israel and iran. all of these factors escalating the tensions around the middle east that are supporting oil
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prices and causing brent crude to be at a three-week high. we're also seeing strength elsewhere in the energy sector. even natural gas actually turning around and reversed course and has moved higher in this session. a lot of volume in the energy seconder to in this trading day. back to you. >> before you go, sharon, the timing of the announcement by netanyahu, either this takes a potential attack on iran by israel off the table before then or this is one big head fake. >> absolutely. in terms of the oil price and the way oil traders view these headlines, they see an announcement, they just see there could potentially be more instability in the region, and that is supportive enough of prices, regardless of what the actual outcome will be or is most likely to be. >> all right. sharon, thank you very much. >> okay. well, it's "sesame street" versus wall street. according to these ads, wall street is evil and supported by
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mitt romney. he's going to destroy "sesame street" as well. here's the ad. >> bernie madoff, ken lay. criminals, gluttons of greed. the evil genius who towered over them, one man has the guts to speak his name. >> big bird, big bird, big bird. >> big, yellow, a menace to our economy. mitt romney knows it's not wall street you have to worry about. it's "sesame street." >> i'm going to stop the subsidy to pbs. >> mitt romney taking on our enemies, no matter where they nest. >> oh, god. it must be political season, bill. >> you think? >> an ad like that may explain why the obama campaign has seen a major reversal of fortune from heavy hitters on wall street. >> employees of big banks did more financially for the obama campaign than anybody else donating a total of over $3.4 billion. that was in 2008. now they've gone the other way
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giving more to romney than anybody else. so does wall street -- are they using its money as a weapon to strike back at all the bashing from the white house over the last four years? how much does it change the top? with us is zach and larry mcdonald. zach, this -- wall street has been a troubled industry anyway. you think that has something to do with their view of the administration right now, yes? >> yeah, i mean, first of all with the lead-in of that commercial to this, i'm having a hard time fully taking this segment seriously. >> well, it is -- >> can you take it seriously with that ad? >> that's what i'm saying. and weirdly enough, "sesame street" actually asked the obama administration to pull the ad because they felt it was doing an injustice to "sesame street." i think separately from this, some context. obama raised $181 million in september. the $3 million swing from 2008 that wall street gave to obama
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and the $3 million it's now giving to romney, it's significant as a swing, but i don't think we should overstate the impact this will have electorally. on a deeper level, wall street is a contracting industry. that is simply a product of 2008. i think that would have happened regardless of whether or not mccain or obama had won. there is a degree of looking for a source of blame rather than, you know, this is a troubled time for wall street. again, i think that has a lot to do with the dynamics of the high levels of profitability wall street achieved 2004 through 2008. >> i see it as, here's an ad, and it makes the public look stupid. larry, you think they've gone too far in this. why? >> i wrote a book and outed a lot of the bad guys. i'm here to tell you that the democrats have essentially used the financial crisis as this
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massive broad brush. when capitalism became so close to really the ending point, we should have had a more specific, defined regulatory reform. dodd frank's been a complete -- you know, credit card companies did not have anything to do with the financial crisis. there are so many people impacted by dodd frank. we're four years after the failu failure. from a regulatory point of view, the worst thing that capitalism and any segment of our economy needs is uncertainty. we just have piles and piles of it facing the financial space. >> but bill, aren't we losing the point here? governor romney at debate was very clear in terms of saying, i'm going to look at programs, and i'm going to say, is this program worth it to borrow money from china? i mean, that was his answer. so to throw an ad out there with
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big bird and say, oh, you know, we should be afraid of big bird and not wall street. i mean, it makes the public -- it makes me feel like this ad thinks that we are stupid. we know the point here. >> i think the sarcasm is pretty clear in there, don't you? i mean, come on. we all saw that as a light-hearted moment. even "saturday night live" made much of it. that is what it is. as far as wall street goes and the perception, zach, does it necessarily mean that if wall street's going to support romney, if he wins, does that mean there's a comeback in the making for them? >> yeah, i think it's a mistake for people on wall street to assume that a romney administration is going to change the declining dynamics and the declining profitability. a republican president is not going to be able to do anything about decreased trading volumes, is not going to do anything about lower commissions per trades or the general trend in the industry toward contraction. i agree with maria.
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there may have been some sarcasm in this ad, but it was kind of lost on me as well. it just seemed absurd. >> i don't get it. >> it's very inside baseball. that's the kind of commercial you would run in-house for the amusement of the staff members. to play it publicly is a little poor taste. >> or that "saturday night live" would have done. i don't think romney is reversing a lot of these trends. if you think that's going to happen, that's probably not the case. >> i think we're missing one thing. my point would be in the '80s, the interest cost of our national debt was 18, 19% of the budget. last year it's about 9%. if the ten-year treasury goes back to the 5% neighborhood, which it was in 2007, the interest on our debt will be upped to 21% of our budget. i think romney has a lock on handling that severe problem facing us. >> that's not lost on ben bernanke either, larry. >> this assumes interest rates are going to go up as deficit
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goes up as opposed to the fact the dollar is a currency of last resort and has kept rates chronically low. i know we've gone way far from big bird, but we probably should have anyway. >> and way over time, but it's okay. it was a good discussion. thank you both for joining us. >> thanks. >> thanks so much, everybody. we have about 40 minutes left in the program and before the closing bell sounds. we have a market down about 100 points. chb >> by the way, have you seen apple shares lower? is this stock? trouble? we're going to look at the charts on that. >> then after the bell, alcoa kicking off the earnings season tonight. chairman and ceo klaus kleinfeld breaks down the numbers with us. join me for that interview.
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welcome back. it's been quick, the move on apple. apple shares falling into correction territory today, briefly down 10% from the highs this year. they didn't stay there long. bertha coombs has the details. over to you. >> it's been watching the technical on apple here over the last it few days. it is trading below its 50-day moving average. today it fell very close to august lows. a lot of folks were watching that as a turning point potentially. would people buy there? it appears they have. it has actually gone positive. if it manages to close
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positively, it will stanch a three-day losing streak. if it closes negative, it will be its longest four-day losing streak since the end of july when it was last below the 50-day moving average. apple, of course, for the year is up. the big drag still this afternoon is coming from intel, microsoft, and all the pc-type makers and amazon. >> all right, bertha. thank you so much. want to point out that apple is lower, so is the dow. this really happened in less than a month, the move in apple. is now a buying opportunity on apple, or is there something bigger going on here? we're doing talking numbers on apple today. on the technical side of the story is ennis tanner. on the fundamental side is rob. gentlemen, good to see you. thanks for joining us. ennis, this is going to be a great segment. take us through apple now on the technical side. >> i think the short-term and the long-term, it's important to distinguish. let's look at the short-term chart first. we can see it's a classic
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head-and-shoulders pattern on the chart over the last two months. the stock broke out from the $644 level, but it actually couldn't sustain the breakout. it developed a little bit of a neckline here at $660. i think $620 to $610 is the target for this downward move. i think $60 and $620 is a buying area. that's for a hort-teshort-term maria. i think apple might put the top in for a four-year bull market. i'll show you why. if we go longer term for the secular bull market, you can see here that each time apple is broken out over the last three years, we've seen the stock not revisit the previous highs. you have a breakout. it consolidates without revisiting the previous highs. you have another breakout. it doesn't revisit. you have another breakout. this is the first time it's actually below the high of the $644 from earlier in the year. it's showing weakness on volume distribution. it's the first time it hasn't been able to sustain the
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breakout. i think apple might be over in terms of the easy money, the long bull market. >> you would think so. it's gone from 400 to 700 this year alone. you're saying you can do some trading situations here. beyond a couple of trades long term, you think -- >> all good things must come to an end. i think apple might be over. >> wow. okay. let's get your take, rob. what do you think in terms of the fundamental story? would you buy apple here? >> i would buy apple here. maybe the easy money is over. it's not exactly a hidden gem. i would own the stock here. i actually tend to think the stock over the past week or so is kind of digesting the news of the iphone 5. if you look historically, when apple launches a new product, the stock almost always sells off on the launch. this time it didn't. it actually went up following the iphone 5. i feel like it's doing now what it might have normally done, which is sell the news. outside that, i think the economic view is still really strong.
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the stock is not very expensive. i feel like if you don't own apple, what do you own? >> it's the market. rob, thank you so much. good to see you. ennis, thank you. we'll be watching this story. bill, over to you. >> we have breaking news on wells fargo. scott cohn stepping in now with that. >> you may have seen it on your screen a short time ago. we can look at the chart of wells fargo, which is getting hit toward the close here on this news of a civil fraud suit filed by the u.s. attorney in manhattan. the latest action by a federal financial fraud enforcement task force. it's slightly different than the suit we previously saw against jpmorgan involving bear sterns. this is about fha-insured mortgages that the government says that wells fargo was misrepresenting to get fha insurance on these mortgages for a period of some ten years. they say about $190 million worth of mortgages may have been misrepresented, essentially ripping off the taxpayers for
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this fha insurance. under the law, the government could recover triple damages. this is a $570 million suit against wells fargo. we're following it. we'll teep you posted. back to you. >> just off the lows, scott, thank you very much. we're heading toward the close, otherwise, with about 30 minutes left. the dow down 100 points at this hour. when we come back, we look at the health of wall street. new york state comptroller on the looming -- whether the looming fiscal cliff and increasing regulation are threatening wall street's comeback these days. plus, speaking of which, nearly half of all wall streeters are expecting a bigger bonus this year. will they get it in and more importantly, do they deserve it? that debate is coming up. and from bull market speed bump to chaos. breaking out at a bull fight in colombia. we're just wondering, is this scene a preview of what may be coming to our stock market? tdd#: 1-800-345-2550 this morning, i'm going to trade in hong kong.
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welcome back. an unbelievable story emerging in the saga of high-speed trading.
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eamon javers in washington with the story. >> let's call this the mystery machine to start with. let me walk you through some analysis that was done at an analysis firm looking at all these high-speed trading tapes. here's what they came up with, starting with the one program at issue here. the placed orders in 25 millisecond bursts involving 2500 stocks, never executing a single trade. repeated pattern of 200 fake quotes, then 400, then 1,000. that was the tell that it was one machine. all of it taken together generated millions of quotes and represented about 4% of all the activity in the stock market last week. the issue here is that the sec does not right now have the capability in it realtime to see this data as it flows through the pipes. they're working on that capacity and have a new software system
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called midas, which is expected to come online later this year. until then, they're going to have to rely on their very new bureau just created in order to crunch this stuff and understand it. >> i have a quick question. you say they put in all those orders but never executed a single trade. was that the intention, they didn't want to execute a trade? they wanted to move prices in. >> right. presumably they're just pinging boo the system to try to find out where prices are at any millisecond in order to be able to get access to a really cheap price. if they see it, they can grab that one off the shelf. another possibility in terms of the sbeintent here is this was attempt to slow down the trading machines to get slower speeds for others and faster speeds for the high-frequency traders themselves. though would be a malicious intent, and we don't know who the trader was involved. >> all right, ai meamon. our next guest is going to give
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us a report card on the securities office. if this year, the securities industry has lost 1200 jobs and earned $10.5 billion in profits. >> another interesting finding from his office, the cash bonus pool for the securities industry employees it down by more than 13%. we'll have more about beus onus next hour. right now, wall street's annual check up from new york state comptroller. first of all, your thoughts on the high-speed trading algorithms. is that getting out of hand in your view? is wall street overdoing the high-speed trading thing? >> i'm asked that very often. i guess the jury is still out. certainly when you look how this year has been going overall, been pretty good. i know today's been a little down. hard to really assess what the full impact of that is. you know, some have called for greater oversight in that area. >> are you? >> not yet. we're always concerned about dealing with the regulatory reforms and oversight lalready that's waiting to happen.
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>> let's talk about that. what are the most striking findings of this year's report on the securities industry? >> probably no surprise, it's an industry still in transition. a lot of uncertainty out there. wall street's trying to adjust to that. slow economic recovery in this country, uncertainty in europe, chinese economy slowing down, regulatory reform starting to be implemented, anticipating even more, uncertainty still with the election season. overall, revenues down a bit, profits up though. the question is will this year end like last year. we had a strong first half of the year and third and fourth quarter not doing so well. still too soon to tell on that, but what you're starting to see, contraction as far as employment. good news there, not as severe as we would have thought a year ago, but we're starting to see an acceleration from the summer months into the fall. >> but your report paints a picture of new york city as a microcosm of the rest of the country and the financial
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services industry impact on that. >> when you consider that in terms of head count, you're talking about 5% of the employees in the city. in terms of contribution, in terms of wages, you're talking about 23% contribution to the city's economy. so those jobs are very important to grow the economic engine for our city, for our state. that's where our tax revenue certainly comes into play. >> so you really have to walk a balance to ensure that you're getting the number of tax revenue that are required to grow this economy. let me get your take on what you've been doing on a state level in terms of spending and in terms of raising revenue. because pension reform, i know you've worked on quite a bit. where are you in that process in terms of cutting back and the spending, given the debt this country faces? >> well, the good news in new york is we've made significant progress. credit to governor cuomo and the
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legislature on making choices. really bringing down some budget gaps, but much less severe than first anticipated because of making tough choices on spending with regard to pensions. fortunately, our fund is in much better shape than most of the other state plans. our investment return has really been strong. there are also been benefit changes. new tier five, new tier six. over time that, will have an impact. in new york, we're taking a lot of new steps in a positive direction. >> are you done yet with the cuts? >> you can't be done because there's going to be another gap next year. so far the budget we end our fiscal year on march 3i1st, sees to be tracking, but there's not much room for error. it gets back to wall street. we need this sector of the economy healthy, profitable. that helps generate revenue for the state. >> your report shows, as we said, job growth is down. you know, the number of jobs in the city are down.
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bonus pool, down. we all know wall street is highly cyclical. do you sense we're going to see an upswing at some point, or are we looking at a different structure for this industry in the wake of what happened in 2008 and '09? >> that's the question, what's the new normal? what's interesting in this post. recessionary time, whereas you look at recent recessions in prior cycles, the wall street job growth led in terms of the job growth in the city and the state. it's not what we're seeing right now. other sectors are growing more significantly. they're lower wage, lower compensation. in terms of contribution to state revenues, we're talking about, you know, 14% contribution to it state revenues rather than 20% before the downturn. i think we're all trying to figure out what the new normal is going to be president the . t >> meredith whitney says there are more job cuts to come on wall street. are you expecting further job cuts in. >> yes. >> all right. >> hopefully not too many.
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>> tom, thanks very much. good to see you as always. we get to jackie deangelis know. a news flash on bank of america. >> i want you to look at the intraday chart of bank of america. we saw a little bit of a selloff here at the end of the day. we're down about 1.7% right now. looks to be off the news we got of wells fargo. that seems to be impacting bank of america now. of course, not a great day for the financials in general or the market, that is. again, this stock taking a little bit of a hit at $9.12. >> alreal right. thanks so much. we're down about 96 points on the industrial average. the nasdaq also negative. >> investors bracing for what is expected to be a weak earnings season for the third quarter. will fundamentals finally catch up to what has been a strong year for the market bulls? we'll look at that coming up. speaking of earnings, how is the slowing global economy affecting alcoa's bottom line?
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klaus kleinfeld will be joining maria at the top of the hour.
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[ male announcer ] how do you make 70,000 trades a second... ♪ reach one customer at a time? ♪ or help doctors turn billions of bytes of shared information... ♪ into a fifth anniversary of remission? ♪ whatever your business challenge, dell has the technology and services to help you solve it. i haven't seen this video yet. >> i haven't seen it either. >> this past sunday a bull fight
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in colombia went out of control. amateur matadors jump into the ring and test their skill against fierce bulls. that's a good idea right there. >> a metaphor for what's going on in the stock market is what we're asking. this bullish market about to be thrown into chaos from an expected weak earnings season. what do you think, will? what are you expecting? >> pretty flat season, maria. i think expectations are reasonably low. little change from a year ago. probably, you know, pockets of weakness. overall, pretty flat. >> so you want to put money into the market? >> we do like the market. we don't think it's overvalued. we think it needs a little rest from the summer. >> will investors be gored from third quarter earnings? >> it depends how they're set up. i agree with will that perhaps in the energies and materials
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the numbers come down more. >> remember, it's ok. it -- it's october. are expectations too low for this month in. >> you know, you could make that argument coming into the election, all the problems in europe. in september the market continued the rally. you know, you could see a further surprise to the upside. i think people still don't expect us to break out from here. wh . >> what are you seeing on the trading desk? >> you're not seeing a lot of volume. that's been the trend over the last six month, year, year and a half. people are sitting on their hands. if you have been out of the market, you've perhaps underperformed a little bit. you haven't seen people jumping in. with all of that, we still manage a nice rally. you know, the thing that would really convince everyone is if you saw a real uptick in volume, which you haven't seen yet. >> who would you be buying right
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now, sector-wise? >> we don't look at it quite that way. we look more broad asset terms. i guess as close to a sector bet we would be making is in the energy space. we've just added energy master limited partnerships to our client accounts. >> does that mean you think oil has more to the upside? >> it's not about oil. it's about the u.s. becoming independent. at the same time, the mlps are giving our clients a really good income flow as well as exposure to that growth. >> so you are 45 to 50% equities. you also like equity-like assets like mlps. talk to us a want what a po portfolio should look like going into year end. >> roughly we're about 45 to 50% equities. >> what's the rest of the 50%? >> the other 50% is about 5% in fixed income. some of our clients do need income, so it's munis.
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we're also looking for other things for income like emerging market debt and high-yield bonds. the rest is in things like long/short equity hedge funds as well as commodities. >> very good. bill, i'll get your thoughts on that coming up in the countdown. >> thanks so much. >> mary thompson is at the news desk. what do you have for us? >> capital one is the latest bank to be the subject of one of those denial of service attacks. the company saying its online systems are experiencing some problems. it is working to resolve those problems as soon as possible. additionally, the company telling cnbc it doesn't anticipate that any customer information has been breached because of this attack. back to you. >> all right, mary. thank you very much. heading toward the close with about 15 minutes left. the dow still hovering near the lows, down about 95 points. >> one of the top senate democrats throwing cold water on a potential bipartisan tax deal. >> it is an alluring prospect to
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cut taxes on the wealthiest people a, reduce the deficit and hold the middle class harmless. but the math dictates you can't have it all. >> so will the leaders who dig in their heels have to get out of the way to get anything done? that's next. also, german chancellor angela merkel getting greeted by protesters dressed as nazis during her first visit to greece since the debt crisis began. more of that coming up. which can withstand over three and a half tons. small in size. big on safety.
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welcome back. more meningitis related deaths from a contaminated steroid seema mody with the story. >> the outbreak continues to get more deadly. the cdc reporting 11 deaths as of this afternoon, and the number of cases increased to 19 -- 119. the steroids came from the new england compound in massachusetts. the highest cases are in tennessee and virginia. health officials say patients have had symptoms generally starting from one to four weeks after their injection. not all patients who received the medicine will become sick. that's the latest.
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back over to you, bill. >> seema, thank you very much. well, not a pleasant story here, either. german chancellor angela merkel daring to go to greece today. she's visiting there for the first time since the european debt crisis began. germany, of course, holding many of the cards forcing greece to accept the severe austerity measures. >> some of these demonstrators going so far as to dress in nazi uniforms. some of the public using unfortunate methods to let their feelings known. the protesters are accusing merkel of unfairly forcing greece to cut government jobs and benefits to keep the european union intact. >> this is what has plagued the european union as they try and enforce these austerity measures. we saw it in spain. we've certainly seen it in greece. we haven't heard much about it recently, but here it's very much in evidence as she goes there to -- actually, ironically, praise them for what she sees as progress. >> it feels like things are getting worse on the unrest side
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of the coin throughout europe. it's once again that, you know, manifestation of something's got to give. they don't want to see the cuts happening. yet, they're not going to be able to pay their bills without the cuts happening. >> and it will only get worse, i think, as time goes on. more of the austerity measures take hold and the reality sets in further. >> as the people feel the effects of, okay, this program is cut, that program is cut. >> here in the u.s., one debate is whether to reform and simplify our tax code to spur growth. is it going to be austerity like in europe or growth measures of some favor here? >> today, senator chuck schumer throwing cold water on the plan. >> it would be a huge mistake to take the dollars we gain from closing loopholes and put them into reducing rates for the highest income brackets. it's an alluring prospect to cut taxes on the wealthiest people, reduce the deficit, and hold the
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middle class harmless. but the math dictates you can't have it all. >> well, he's voting for austerity over growth in that regard. >> right. at some point you need to see economic growth in order to see job creation happening. how do you get to economic growth without cutting back on spending and trying to raise some revenue? >> how do you do growth and raise revenue tamat the same ti? that's the problem in europe. angela merkel faces re-election next year. it remains to be seen whether she can achieve that or not. >> we'll see if that issue does dictate our election. it's interesting because i feel like people understand the issues, but they're not necessarily moving on them. >> it's only human nature. it's okay to reduce the deficit, just not in my backyard. >> right, right. same issue with oil. >> we'll take a break. we are coming back with the closing countdown and a recap of the date in a moment. >> and just moments away from
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the kickoff of earnings season. this is what we've been waiting for. alcoa chairman and ceo klaus kleinfeld will join us. you're watching the "closing bell" on cnbc, first in business worldwide. ally bank. why they're always there to talk. i love you, james. don't you love me? i'm a robot. i know. i know you're a robot! but there's more in you than just circuits and wires! uhhh. (cries) a machine can't give you what a person can. that's why ally has knowledgeable people there for you, night and day. ally bank. your money needs an ally.
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three minutes left in the trading session here today. we've acknowledged the five-year anniversary of the peaks hit by the dow and s&p on this day back in 2007. what has happened since that time? we're going to show you some five-year charts to relive this period of time. there was the peak in '07, the cascade through the financial crisis. march of '09, the bottom. then the recovery over fits and starts over the last three years or so. what about other asset classes in that time? the ten-year yield, for example. that's much lower than it was. our markets are getting back to almost where they were in stocks five years ago. yields are much lower, thanks, of course, to the federal reserve. we were in a 4, almost 5% range back then. now the yield on the ten-year is 1.7%. oil, remember the good days when
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we hit almost $150 in 2008? we're much lower than that now and wringing our hands as it approaches $100 a barrel right now. gold, how about gold? huge gains over that time. we were in the $500 range back in late '08. now, of course, $1765 per ounce. sector-wise, five-year performance, very defensive feel to it with consumer staples, discretionary, and health care among the leaders there. of course, technology a perennial gainer in this period. then the rest of them are negative. energy is among that group right there. let me talk with warren myers and bill nichols. what about the next five years? do we go much higher? is the sense we go much higher from here, or is the jury still out in. >> i'm positive or the u.s. equity market long term. i'm much more concerned over the next couple of months and the next year. there's so much overhanging right now that i think we're due for some rough -- >> i mean, we've had a great
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ride since march of '09. >> you look at the yields on treasuries and compare that to equities. all things being equal, if everything else in the economy were solid, this equity parkt would be flying. long term we're solid. >> bill, we saw the defensive nature of the sectors that have performed the best over the last five years. would you remain defensive? >> i think a little bit of defensive posture is never a bad thing. the question is, will the financials really rebound? that's been one of the sectors that's underperformed in that time frame and also in recent had history. that's one group to keep an eye on going forward. >> so financials you like. what about energy? that has been a market leader as well. >> on the chart it was down, you know, 4% in the five-year period, which is interesting. i wouldn't have said that's the case. i think people are taking their numbers down in the energy space maybe a quarter or two. after that, i think it would be another driver on the upside. >> okay. thank you both. alcoa numbers coming out shortly could